CoreLogic, a leading global property information, analytics and data-enabled solutions provider, has released its 2021 Hurricane Report, providing analysis of single- and multifamily residences along the Gulf and Atlantic coasts and revealing nearly 8 million homes with more than $1.9 trillion in combined reconstruction cost value (RCV) are at risk of storm surge. This year’s report also examines hurricane wind and reveals more than 31 million homes with nearly $8.5 trillion in combined RCV have moderate or extreme risk exposure to hurricane winds.
With a record high of 30 named storms in the 2020 Atlantic hurricane season and the larger looming impact of climate change, CoreLogic is urging insurers and lenders to prepare for an unpredictable season by shifting the focus from loss adjudication to loss prevention and avoidance. To help mitigate the effects of hurricanes and other natural disasters, it is important to support community resilience goals and understand the risk faced by those impacted.
“To provide a 360-degree view of the impact of climate change, we took a look at the US housing economy after a hurricane strikes and noticed a significant spike in mortgage delinquency rates and loss in housing inventory,” said Frank Nothaft, Chief Economist at CoreLogic. “Communities most affected by natural and financial catastrophe include those with already-high delinquency rates such as in Lake Charles, Louisiana, as reflected in the pre- and post-Hurricane Laura landfall rates.”
CoreLogic studies have shown that up to 70% of the damages from flood to homes is uninsured. CoreLogic evaluated the storm surge and hurricane wind risk levels for both single-family (SFR) and multifamily (MFR) residences along the Gulf and Atlantic coasts, from Texas up to Maine, for the 2021 hurricane season. Analysis includes the total estimated reconstruction cost value (RCV), which is calculated using the combined cost of construction materials as well as equipment and labor assuming total (100%) destruction of the property.
“Resilience can be thought of as our ability to recover quickly after a shock, and because we cannot alter the frequency and severity of natural catastrophes, the continuity of our financial system relies upon the expectation of resilient communities,” said Tom Larsen, Principal, Insurance Solutions at CoreLogic. “The current focus is on anticipating what challenges to resilience will be confronting us in the future – a future where we expect more damaging events.”
